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UK government offers £100m broadband boost, but only for cities

£100m will be pumped into creating 10 'super-connected' cities the UK government has announced.

The UK government has announced a plan to invest £100m ($156m) to create ten ‘super-connected’ cities equipped with high-speed broadband in the country. The announcement was made by the Chancellor of the Exchequer George Osbourne in his Autumn Statement and forms part of a general £5bn increase in infrastructure spending, in an attempt to boost the UK’s stalling economy.

Ten cities were included in the plan and include London, Edinburgh, Belfast and Cardiff, with the other six cities to be announced in the 2012 Budget. The aim is to provide fixed-line broadband on between 80-100Mbps and also ‘high-speed’ mobile connectivity. The statement said there would be a focus on small to medium sized enterprises and ‘strategic employment zones’, on order to stimulate growth.

“It means creating new superfast digital networks for companies across our country”, Osbourne told the House of Commons. “These do not exist today. See what countries like China or Brazil are building and you’ll also see why we risk falling behind the rest of the world,” he said.

No further details revealed and it was unclear how the programme would differ from UK incumbent BT’s well publicised intention to increase the speed and availability from its ‘Infinity’ branded FTTC offering from its current 40Mbps to 100Mbps, with which it expects to cover two thirds of the UK by 2016. Virgin Media already offers 100Mbs cable-based download services to many areas, and expects it to be available across its entire reach of 13 million homes by mid-2012.

“While details remain unclear, this announcement does look odd,” Rob Gallgaher, head of Broadband & TV Research, Informa Telecoms & Media, told Telecoms.com. “Cities tend to be the most cost-effective areas for operators to target with fiber-to-the-x and mobile broadband, because the density of population and housing means they can cover more people and homes with less infrastructure and so hope to make a return on their investments sooner rather than later.”

The report only briefly mentioned boosting the availability of superfast broadband to rural areas with the opening of £20 million Rural Community Broadband Fund, which the government would extend, “if it proved successful”, according to the statement.

“On the face of it, this announcement will certainly upset campaigners where broadband is poor or not available at all,” said Gallagher. “It’s not clear, however, how this fits in with existing UK and European Union schemes to aid deployment in rural areas, including the recently announced Connecting Europe Facility.

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While he agrees that there is economic logic to focussing on businesses, Gallagher is not sure why the government needs to accelerate the push the availability of faster speeds so soon.

“Where there are clearer productivity and efficiency benefits to businesses having access to superfast speeds, it is not still entirely clear how society and the economy will benefit from consumers having them access to them sooner rather than later”.

To play devil’s advocate, the evidence is fairly strong now that broadband is one of the few areas where investing in better infrastructure has proven to provide for a noticeable GDP boost and thus jobs. Not that I’m saying putting public money into urban broadband is an ideal solution but, generally speaking, good internet = better business output.

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